For a long time, Southend-on-Sea and Thurrock have sought new housing developments to help meet rising demand. In Thurrock, the development in Linford and the Hope Green estate in Stanford-le-Hope were designed to meet that need. Southend’s answer was the Meadow Grange Development, linked to land used in the proposed Fossetts Football Stadium Development on the border with Rochford. Now all building work has ground to a halt.
All the Essex sites obtained approval less than two years ago. The Lindford development promised over 250 homes of between one and four bedrooms, and 150 homes were planned in Stanford-le-Hope. In Southend, 221 homes were planned: 32 flats and 189 houses. The ‘turnkey developer’, Guinness Homes, was offering shared ownership. (A turnkey developer owns the land and finances the building and fitting out of a development.)
The new developments were planned using prefabricated buildings provided by Ilke Homes, specialists in social housing, and produced at their factory in Knaresborough, North Yorkshire. This modular technology allows for swift and more environmentally sustainable construction.
The concept of constructing a dwelling off site and erecting it on site is nothing new. In both the US and Europe, modular housing is a growing market that helps meet the demand of fast-growing urban centres. There are many examples of prefab homes being used after the Second World War to provide housing quickly, but many were of low quality, using irregular building materials. As a result, this building method fell out of fashion as more traditional building once again became the norm. Some post-war prefab examples can be found close to the Meadow Way development in Southend.
Recently, modular homes have made a resurgence in the UK. Build times are much faster, and because the shell and roof can be erected in days, they are less subject to build delays due to weather. They use building materials which meet new strict standards for energy efficiency and sustainability, and are estimated to cost 32% less to heat than a traditional new build.
In Essex, Homes England were to provide funding for the developments, and all seemed set fair. In fact, the local Echo reported on 5 May and 14 June that development was well under way. This contrasted with other sites outside East Anglia for which Ilke Homes was acting as the turnkey developer, where construction was held up by planning issues.
Flat pack dreams are flattened
Yet on 12 June, just a few days after the Echo stories, all work ceased in Southend and Thurrock. Ilke Homes had stopped work and was seeking a buyer. A few days later when no buyer was forthcoming, the company went into administration.
A significant number of the 1,115 staff working for the firm were made redundant. This figure does not count the affiliated tradespeople working on all Ilke building sites in Essex.
How did this happen?
IIke Homes said they were “exploring a sale of the business as volatile macro-economic conditions and issues with the planning system complicate fundraising and housing delivery”.
Later the administrators stated that the firm had “faced the challenges of unprecedented inflation and a lack of land supply linked to planning processes”.
Ilke, in other words, owned plenty of sites for turnkey development, but without the necessary planning permission at their sites outside Essex, they were unable to generate enough income to offset the increased building costs caused by inflationary pressures.
Further problems in the sector
The financial troubles hitting these new homes was not isolated to Ilke. In May 2023 Legal and General Housing ceased manufacture of its modular homes. Again, issues with planning permission and disruption such as Covid were cited. Last year Caledonian Modular also faced difficulties because of spiralling costs.
In 2022 Swan Housing, a social housing provider based in Essex, closed both its modular facilities in Basildon, blaming rising costs. Swan admitted in May 2022 that it had breached the requirements of the Home Standard, and in February 2023 it became a subsidiary of Sanctuary Housing.
The outcome of all this is that workers have lost their jobs and houses remain unfinished.
What happens now?
Questions remain as to what will happen to the homes under construction in Thurrock and Southend. Can the units be completed despite the original manufacturer going into administration, given they were made in Ilke’s factory? Will new units be able to be added to complete the project without the need for additional funding? To what extent will the local authority assist with the developments, given the need for social housing?
IIke Homes went into administration in part because of an outdated planning system. MakeUK, the voice of Britain’s modular housing manufacturers, wants the government to introduce new legislation that would speed up the planning process and cut red tape. As they point out in a recent report, “The vast majority of these [planning] measures are still focused on building houses in the same way as we have done for the last 100 years.”
Answers to what happens to the Essex sites need to be sought from officials and politicians in the coming months. Potential homeowners have had their dreams shattered. As have redundant construction workers, some of whom are now seeking redress against their former employer. If the government had acted sooner to streamline the planning system, it’s likely IIke Homes would still be operating and many of those homes would now be nearing completion.